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Food Price Spikes, Price Insulation and Poverty

Author

Listed:
  • Anderson, Kym
  • Ivanic, Maros
  • Martin, Will
Abstract
The analysis in this paper first considers the impact on world food prices of the changes in protection for staple foods during the 2008 world food price crisis—changes that were generally designed to partially insulate domestic markets from changes in international prices. We find that this insulation substantially increased world prices for key food crops such as rice, wheat, maize and oilseeds. The net effect was to reduce domestic prices in only a few developing countries, while domestic prices in many other countries were increased despite their attempts to insulate against the price rises. We estimate that the overall reduction in import protection or increase in export restraints in developing countries reduced the extent to which global poverty would otherwise have risen. However, the actual poverty-reducing impact of insulation is much less than its apparent impact, and there are now domestic policy instruments that almost certainly could reduce the impact of higher food prices on the poor more efficiently than variations in trade restrictions.

Suggested Citation

  • Anderson, Kym & Ivanic, Maros & Martin, Will, 2013. "Food Price Spikes, Price Insulation and Poverty," Conference papers 332389, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332389
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    File URL: https://ageconsearch.umn.edu/record/332389/files/6375.pdf
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    References listed on IDEAS

    as
    1. Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank.
    2. Martin Ravallion & Shaohua Chen & Prem Sangraula, 2007. "New Evidence on the Urbanization of Global Poverty," Population and Development Review, The Population Council, Inc., vol. 33(4), pages 667-701, December.
    3. Christophe Gouel & Sébastien Jean, 2015. "Optimal Food Price Stabilization in a Small Open Developing Country," The World Bank Economic Review, World Bank, vol. 29(1), pages 72-101.
    4. Ivanic, Maros & Martin, Will & Zaman, Hassan, 2012. "Estimating the Short-Run Poverty Impacts of the 2010–11 Surge in Food Prices," World Development, Elsevier, vol. 40(11), pages 2302-2317.
    5. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
    6. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications - Books, The World Bank Group, number 2611.
    7. Maros Ivanic & Will Martin, 2008. "Implications of higher global food prices for poverty in low‐income countries1," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 405-416, November.
    8. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications - Books, The World Bank Group, number 9436.
    9. Thomas W. Hertel & L. Alan Winters, 2006. "Poverty and the WTO : Impacts of the Doha Development Agenda," World Bank Publications - Books, The World Bank Group, number 7411.
    10. Hanan G. Jacoby, 2016. "Food Prices, Wages, And Welfare In Rural India," Economic Inquiry, Western Economic Association International, vol. 54(1), pages 159-176, January.
    11. Pursell, Garry & Gulati, Ashok & Gupta, Kanupriya, 2007. "Distortions to Agricultural Incentives in India," Agricultural Distortions Working Paper Series 48483, World Bank.
    12. Christine D. Lasco & Robert J. Myers & Richard H. Bernsten, 2008. "Dynamics of rice prices and agricultural wages in the Philippines," Agricultural Economics, International Association of Agricultural Economists, vol. 38(3), pages 339-348, May.
    13. Harold Alderman & Ruslan Yemtsov, 2014. "How Can Safety Nets Contribute to Economic Growth?," The World Bank Economic Review, World Bank, vol. 28(1), pages 1-20.
    14. Kym Anderson & Signe Nelgen, 2012. "Agricultural trade distortions during the global financial crisis," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 28(2), pages 235-260, SUMMER.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Food Security and Poverty; Food Consumption/Nutrition/Food Safety;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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